As smartphones get more and more robust, hackers are looking for new ways to get the most from what have become powerful mobile computers. Manufacturers want to keep that from happening, though, which is why we have situations like the strict lockdown on the iPhone’s OS. There is one OS that still gives hackers the freedom they desire: Palm’s WebOS. With news that Palm could potentially be purchased, it’s sad to think this might all go away. In the meantime, though, it’s pretty damn cool.

It turns out WebOS can be hacked to run virtually any Linux program. The proof of concept was done by installing OpenOffice on a Palm Pre. A Pre people! Okay, it’s not that exciting, but it is a neat discovery, even if it doesn’t have much practical application.

The hack is much more involved than typical homebrew installs. You have to root the phone, install a new windows management system, modify the startup system, and then install everything using Debian. Why you would do all of this is beyond me but just knowing that you can has to feel good, right? Right guys? Palm users? Palm does have users…right?

The last quarter’s financial results are in from Palm and things look grim. Everyone expected it. Palm warned us. That doesn’t take the sting out of $22 million in losses and some ugly sales numbers. The company shipped 960,000 phones last quarter, which sounds great until you see that it only sold 400,000 to consumers – 30% less than last quarter. That’s a lot of handsets to be sitting on the stock shelves.

The news almost certainly points to a buyer. Palm’s had nine months of work on WebOS to turn this ship around and it’s just not happening. The longer it lingers in a market where juggernauts like the iPhone and the Droid exist, the worse things are going to get. Palm needs someone to bail it out, the only question remaining is, who?

It could very well be RIM, though I doubt it would pull the trigger. RIM needs a more consumer-friendly platform, which WebOS would offer. There’s also someone like HP, a company that could use a cellular presence. The most likely, though, is probably Google. Google has the cashflow to throw a pile of money at Palm, dissect the company for all the good parts and people, keep development going on the stuff it likes and just scrap the rest. It also has the relationships with wireless providers to get Palm out of the mess its currently in, relying mostly on Sprint, which has its own sales issues, to keep the company alive.

Whoever it is, I’d expect serious discussions to start before the year’s end.

Palm is preparing to launch the WebOS Plug-in Development Kit next week, a developer tool that should have dropped with the Pre. It’s still a great tool, though, one that will supposedly allow developers to port applications from the iPhone OS to WebOS in a matter of days without any performance hangups. You see why this should have been released earlier?

Since the advent of WebOS, Palm’s greatest weakness has been its App Catalog. There just isn’t enough there, mostly because the company didn’t get its developer kit out for months after the Pre launched. That left a lot of people waiting for something good before switching over. In the meantime we’ve seen a new iPhone, two juggernaut Android phones, and a slew of other releases that are much more attractive. The PDK will give the App Catalog a much needed boost, but realistically, it’s probably too late.

I still can’t shake the feeling that Palm should have waited 12 months on the Pre release. It’s not like they’re making significant money off the phone and it’s mostly because of a really poor software experience. I don’t mean WebOS is a bad OS – it’s actually quite the opposite – but without any kind of app support the phone looks archaic next to its competitors.

In a release today, Palm announced it was lowering sales expectations for the year due to slower than expected customer adoption of the new WebOS platform. As CEO Jon Rubinstein put things, “driving broad consumer adoption of Palm products is taking longer than we anticipated.”

His wording seems to suggest that the company still thinks consumers will pick Palm, but that it’s going to take more time. I’ve got news, fellas. It ain’t happening. It’s now nearly eight months since the Pre launched, eight months in which the company has failed to build a strong developer base, to say nothing of mediocre sales. We’re just weeks past Palm’s launch with Verizon, about which we’ve heard nothing. That rarely means good things.

Now everyone has just one question in mind – who’s going to buy Palm? The only other possibility would be for the company to develop yet another device, which I highly doubt it has the money to do. We know RIM and Nokia could both use a better platform, and Dell has been making passing attempts the cell phone market for years. None of them have actually expressed interest, though, and I would think only Nokia or RIM would be in a position to really capitalize on that kind of acquisition.

In any case, Palm is in trouble. We’ll see if it can dig itself out by year’s end.

I’ll start of on a positive note. This is no $500 million dollar hematoma, the likes of which we saw from Palm last year. That’s as good as it gets, though. When you look at the raw numbers, the situation is bad.

For Q2 of fiscal 2010 for Palm, the company sold just 783,000 smartphones, a decrease of 5% from last quarter. Just so you get that, leading up to the holidays and on the heels of the Pixi release, Palm sold fewer smartphones than it did last quarter.

Here’s CEO Jon Rubenstein:

We are continuing to execute strongly against our long-term strategy with the delivery of Palm Pixi, the new carrier launches completed this quarter, and the upcoming opening of Palm’s full developer program. We’re still in the early stages of a long race, and we’re energized by the opportunity to compete in this exciting market.

I hate to be the one to tell you, Jon, but this won’t be a long race at all if you keep losing money and market share. There is no long-term plan. You need to get app development going in a big way. You need to get your devices into the hands of three times as many consumers and hope that half of them like what you sell. You need to have thought of this a year ago, long before the Pre launch.

Unless, of course, your long-term strat is to get bought. That I can actually see happening.